The Stock Market and Investing

Mr_Shiftright

Actually I think most of life is actually random, and this includes the actions of the "top" fund managers. We as humans have evolved into creatures with brains that are trained to see patterns...even when they aren't there.

fintail

I don't know...too much of history seems to repeat for me to believe it is random. I don't believe in any kind of chaos theory when it comes to society.

Mr_Shiftright

Well that can be explained by people continuing to make the same errors in judgment regarding non-existent patterns. For instance, a "hot CEO" from successful company A gets hired by company B, and fails miserably. They call it something like "not a good fit" but in fact he probably had very little influence on Company A's success in the first place.

Same with "hot" slot machines.

We don't see randomness because we don't look at it long enough.

tagman

We don't see randomness because we don't look at it long enough.

If you could look at it long enough you would see more than random. Random is short-sighted. In the very long perspective and big picture, you would see the laws of physics and the universe working as they do, providing an order to things that otherwise make little sense.

And... if open-minded enough, one might even be willing to consider that there could be a purpose to it all.

TM

fintail

We can also see middling CEOs getting hired and rehired elsewhere, as the short term focused corporate system likes to recycle the same old garbage.

I think when it comes to economics, wars, and so on, there are definite patterns.

Speaking of economics, the markets seem pretty healthy right now...up without killing the dollar either.

Mr_Shiftright

Well physics is a science, but economics and war are highly emotional and irrational processes, full of randomness.

And even within nature's processes, there is enormous chaos, destruction and seemingly senseless and unexplainable occurrences.

If the universe were indeed a "watch", you'd take it back and complain :P

tagman

If the universe were indeed a "watch", you'd take it back and complain

LOL.

In a sense, the universe IS a timepiece.

TM

Mr_Shiftright

Well yes quite true, although with the big earthquake in Chile, the earth has actually slowed down a little.

tagman

Well yes quite true, although with the big earthquake in Chile, the earth has actually slowed down a little.

Which will have no effect upon the rate of expansion of the universe... but might get us an extra second for a longer night's sleep here on earth.

TM

Mr_Shiftright

Americans could use it. I think we suffer the most sleep deprivation of any of the industrialized nations.

tagman

Americans could use it. I think we suffer the most sleep deprivation of any of the industrialized nations.

Well... it's all my fault... I lose enough sleep to account for most of the nation's statistical sleep deprivation... so the statistics are therefore distorted.

But consider that Starbucks is open late, and more significantly that most soft beverages contain caffeine... so when you stop and think about it, a significant percentage of the country is essentially caffeinated... sleep deprivation is the inherent result.

Interesting... we are a caffeinated country that is statistically sleep deprived, largely overweight, and that statistically craves Viagra. :confuse:

But then again, we have Tiger Woods to show us the way. :sick:

Please excuse my nonsense... must be from lack of sleep. :shades:

TM

cyclone4

I'm surprised no one has yet mentioned that the Dow finally reached the 11,000 mark. Yes, it closed at around 10,997 but so what. It has been a methodical move to the upside the past few weeks. I will venture to guess that it will be a very good week next week. One of the best indicators is that consumer spending is starting turn the corner. I am certainly doing my share of spending (mostly through Amazon.com). I should be buying Apple products since I have a sizable investment in the company, but I am not sold on the new I-pad

stever

Compared to a year ago, things seem almost normal. At least if you have a job. I think the markets see more growth than predicted with more manufacturing happening.

I heard a few talking heads telling North Americans to bail out of China, but the few things I follow over here (couple of ETFs mostly) seem to be up the last weeks too.

Contractors are relatively cheap right now. I'm having some house painting done.

Mr_Shiftright

Things are better but still *weird*. It seems like the economy goes in fits and starts, surges, pauses, turns left, backs up, wanders in circles.

Hey, this may support my random theory!

Apple is really good at telling people what THEY want, not listening to them.

iPad will be great around the house for instant Internet gratification (once they fix the wireless bug, which seems rather serious), but I can't see carrying this thing around like a little schoolboy's book hugging his chest.

Funny thing---here's one more device that will add to our monthly bills.....you know, if a company tried to offer us what we already pay *in total* for Internet, cable, 3G, data, cell phone, as a "package" deal for "only" $250 a month, we'd all howl like monkeys.

But since they parcel it out into bills for different components that we use at different times, we seem to not mind adding yet another $30 a month to power up our $850 iPad.

stever

That stuff adds up. I have a prepaid cell that costs $10 every 3 months (I use Skype and Google Voice for free long distance calls on my $34 a month land line). I don't watch TV so there's no cable bill. And I get free wireless internet access.

No wonder advertisers never market to me. :shades:

fintail

It does appear random. What I notice lately is the markets are way up, precious metals are up a bit from just a couple months ago, but the dollar hasn't completely collapsed. Usually the former two require the latter.

I don't get the iPad...this is better than my much more capable and drastically less expensive netbook how? I have a smaller screen, yes...but I can deal with it. I don't see myself jumping on that bandwagon...I do have an iPod, but it is ancient and I have no plans to update.

Mr_Shiftright

Well it's blue and shiny and if you criticize it, Apple users will call you a "hater" and picket your house. :P We are talking about a secular religion here.

Did you catch Steven Colbert's review of the iPad. It was pretty funny. He said "it has many things in common with the iPhone---for one, you can't make calls with it".

Then he proceeded to place the iPad on its end and chop up tomatoes and onions with it to make salsa. LMAO.

Advantage over a Netbook would be the APPS, man. You ain't got the APPS.

I read one review/comment from an Apple cult member, who, when told that the iPad won't support FLASH, said "Oh, Flash is so 2000!"

I wouldn't mind having one around the house for like $199.

fintail

A religion..that sounds about right...and I don't follow any of them :P

Apps? I guess I am a low demand user...I can do all I need on my evil empire PCs. My little netbook has 2GB, it can run anything I'd want to do. It's no fun to play on for hours, but for a mobile internet pod, it's the way to go...much easier to travel with than a standard laptop, cheap, efficient.

Yeah, a $199 iPad with iPod-like storage capacity would be a lot more appealing. I might even attend the church.

PF_Flyer

..and the followers are called Macolytes :P

You have to love the MacBook Wheel

fintail

If it wasn't for the source, I could almost believe that :shades:

Mr_Shiftright

That was *very* funny.

anthonyp

I`l tell you what isn`t very funny, and that is the tax form to be filed shortly....Ever notice that the fees a person pays for business services seem to disappear mysteriously? and how if you happen to loose money in the stock market you are limited to a deduction of three thousand dollar, but if you profit then the gain is fully taxed? There are so many things slanted in the government`s favor, that it seem unfair.....It would seem that legitimate cost to do business would be deductible , and then the earnings taxable.....Oh well I guess the next round will be even higher..Tony

tagman

I don't get the iPad

Wello... I happened to be near an Apple store today, so I stopped by to check out the iPad.

I must say that as much as I love Apple as a company to invest in, this iPad is a total joke. It is a glorified iPhone, IMO, and the iPhone is much easier to carry around and is so much more versatile than this fat iPad.

The iPad isn't a phone, isn't really a netbook, has no true productivity software, and no video cam. Unlike the iPhone, it's touch-screen keyboard is totally pathetic. The iPhone is a great little touchscreen keyboard that can be used with the thumb or thumbs, but the iPad keyboard is impossible to rest your fingers against the keys or else it starts typing a bunch of junk, and it is not comfortable to hold all the fingers just above the keys without resting them... that's just one thing that makes a good netbook soooo much better, as well as the ability to tilt the netbook's screen, and use productivity software. Not to mention the better price and storage capacity.

As soon as NVidia's Ion 2 hits the netbooks, they will then be exponentially better than the iPad.

Apple should have made the MacBook Air slightly smaller and more powerful, and they would have had the killer ultra portable device.

TM

tagman

`l tell you what isn`t very funny, and that is the tax form to be filed shortly

There is absolutely nothing fair about our current tax code. It is a mess... designed to punish success.

A real American tragedy, IMO. The tax code could be used to motivate and inspire and reward... and do so fairly... but it does nothing like that at all.

Dont' get me wrong, I absolutely love this country, but our current tax code represents the mentality of the United States government... so what does that say? :sick:

We need a modern and successful tax policy!

TM

carnaught

There is absolutely nothing fair about our current tax code. It is a mess... designed to punish success.


And...stay tuned. It's about to get worse with our soon to be enacted redistibute the wealth program.

fintail

What's the solution though, the rich to pay no taxes? Compared to the rest of the first world, that's pretty much how it is in the US already, isn't it?

Taxes have been cut for years during a time of expensive (undeclared) war, and neither side has the cojones to trim down the public sector. It's insane. Two party system fails again.

carnaught

What's the solution though, the rich to pay no taxes? Compared to the rest of the first world, that's pretty much how it is in the US already, isn't it?

No, actually the top 1% incomes (for example in 2007) paid 40.4% of the total income taxes collected by the federal government.
link title

fintail

Yes, and how much of the means do they hold?

The top 1% of the US have it better (in terms of tax responsibilities) than those of any other developed nation.

tagman

What's the solution though, the rich to pay no taxes?

There is a very big difference between the successful, the rich, and the wealthy.

Let's put the wealthy group out of this discussion, because nothing will ever impact the bottom line for the likes of Bill Gates and Oprah.

But for the rest of the population, where is the incentive for success, if taxes go up significantly when income goes up? It is just plain stupid and counter-productive to punish success. Success is imperative for economic growth, investment in business, research & development, consumer spending (the engine of our economy), that all-critical jobs creation, etc.

The answer is all too simple... a flat tax. With a flat tax, everyone pays their fair share, and no one is rewarded or punished inappropriately. (Of course the accounting firms would be pissed, because they love the complexity of the tax code, as it increases their own necessity and allows them to make a killing off of the general polulation, particularly small businesses. )

I think consumption taxes could be helpful, but they have already proved themselves to be risky, as they could be subject to political whims and allow the government to overly influence purchase behavior.

Again, the simple and fair solution = flat tax.

TM

cyclone4

and how if you happen to loose money in the stock market you are limited to a deduction of three thousand dollar, but if you profit then the gain is fully taxed?

Tony, I agree with you 100% on this. This is SO unjust. I have had first hand experience with this on a few occasions. I had big profits trading commodities one year and lost "my you know what" the next year. It really sucked that I could only deduct $3,000 of the losses. We all agree that there should be some major changes in the tax code.

cyclone4

I agree with you on the iPad Tag. I have a feeling this will be a failure for Apple. I sure hope it does not drag the stock way down when they see that sales are not going according to expectations. I am still holding the Apple stock, but I am starting to wonder if I should take the good profits and run. What do you say "old guru"?

I am of the opinion that this will be another good week for the stock market as a whole now that we have reached that magic number of 11,000+.

fintail

The successful can be neither rich nor wealthy. Success is a bit of a subjective term and isn't directly connected to wealth. A teacher making 50K/year can be more successful than a cereal box-MBA exec making 500K.

If taxing the affluent more is a penalty against "success", then why are there still so many newly "successful" people? It looks like plenty of people still chase their definition of "success" no matter their tax rate. Why shouldn't those who benefit the most from society pay the most to maintain it? How can anyone defend cutting taxes during times of war and other crisis?

Does trickle-down economic theory really work? Looking at real income trends over the past generation or so, it's hard for me to argue for it. Why don't we just cut all taxes to the "successful" entirely, then they can use that money to create "economic growth", to make jobs, invest in business, r&d, etc. The economic gains should more than make up for the loss of tax revenue from that group, right? Does anyone believe it works that way?

That being said, a flat tax is interesting for its simplicity alone, and at least on-paper fairness - when one excludes disposable income ideas. It would depend on the level of the income or cost of living exemption.

Mr_Shiftright

That statistical chart is *somewhat* bogus in that it does not include the other forms of tax that many Americans must pay---so if you include all the payroll, SS, etc, the percentages, while still showing the wealthy paying a good chunk, are not anywhere nearly as skewed.

Lastly beware of statistics about "corporate tax rates"----those are the RATES, not what they actually pay.

However, aside from those who are now hiding in their well-armed secessionist compounds, most Americans wouldn't mind paying taxes if they *GOT SOMETHING* for them.

My gripe is the method of expenditure of my taxes.

carnaught

The successful can be neither rich nor wealthy. Success is a bit of a subjective term and isn't directly connected to wealth

But...even though they're not entirely synonymous, accrued wealth is one measure of success .

Mr_Shiftright

It's an interesting perception although, again, often success is just random luck--in hindsight we award more merit to the individual than they might have actually been responsible for.

e.g., had you invested $10,000 in Donald Trump Enterprises in 1994, you'd have as much as $650 today!! :P

Bill Gates fell butt-backwards into the OS system he purchased and later repackaged as DOS. The opportunity was not pursued by him, but rather handed to him on a whim. Had he not taken it, would another chance have been granted? Who knows?

The idea that the well to do are somehow more deserving of what they got is based on very shaky assumptions.

anthonyp

Hi Tag

I guess the thing for you and I is to just continue to pay the taxes, as complicated as they are and be thankful we have the income to do so..

I wanted to give you and the rest of the gang a` heads up` in that there are some new provisions for any funds that are spent that can be construed as a protection against `terrorism` ...I really do not understand this, but you can deduct the salary of a person or persons and related expenses that you designate as providing security........If you are interested I will find out more Tony

fintail

I still can't support any "pity the rich" ideal. The wealthy or "successful" have it better here than anywhere else, in terms of taxes vs. societal stability. They can move to lesser developed regions, but employing mercenaries to protect them, who may or may not turn around and slaughter them themselves, is a less appealing vision. It's also amusing that in the past, the "successful" paid huge taxes and dealt with it - look at WW2 tax rates for the top few.

I have no problem paying taxes, indeed...although dollar for dollar I don't know if I get more than my European counterpart who indeed pays a lot more, but gets a lot more.

There are so many ways to cut the waste of the money grafted from our incomes by a lazy and incompetent government. Reorganize the military, stop meddling around the world, stop aid to ungrateful and parasitic nations, take on the greedy public sector unions, reorganize social welfare, the list is endless. And nobody in either party will touch any of it.

fintail

Yes that's true, and there are many measures of success.

Wealth is a factor of many functions, including to who a person is born.

Mr_Shiftright

The United States needs a "balanced portfolio". :shades:

tagman

Why shouldn't those who benefit the most from society pay the most to maintain it?

I never said otherwise.

Do the math... that's exactly what happens with a flat tax... the more one makes, the more one pays in taxes. Taxes are directly proportional to income. So your question is clearly answered appropriately with a flat tax.

I do, however, dislike your choice of words, "Benefit from society". You are buying into the idea that those with higher incomes are benefitting from society? The idea that the "rich can afford to pay higher taxes" is a seductive rhetorical political manipulation utilized specifically to get the population to agree to have taxes imposed upon itself. The AMT is one of the worst stealth taxes that was supposed to be a "tax the rich" gimmick, but it actually taxes a huge number of average middle-class folks.

Consider this... those that can get by with less income are sometimes the very ones that benefit from society... by paying a smaller tax percentage. Sounds crazy? Ok keep going... Specifically, for example, what if they live in a zip code that has a lower cost of living? What if they are actually left with much more disposable income, after taxes, than some of us that live in areas that have ridiculously high costs of living? Just think about that. So, who is actually better off in society? The ones that make and need more gross income due to excessive cost of living?... or the ones with smaller incomes but also have minimum living expenses and a larger NET and disposable income?. So, based upon your idea of who has "benefitted from society"... which of the two scenarios should pay the higher taxes?

Anyway, I am just trying to make a point here that it is not good to be suckered into the old political trick of "taxing those that have benefitted the most from society"... it is just another way of appealing to many of us, and getting our approval for our government to raise our taxes. The larger population mass will always agree to shift the bulk of tax payments on "the rich".

I cannot make it clear enough. A flat tax is the way to go. It is simple, and those that make more, pay more. Those that make huge incomes, pay huge tax bills. Those that barely make anything, barely pay any taxes. A flat tax is directly proportional to income. What could possibly be fairer?... or simpler?

TM

tagman

Charlie,

I saw your recent post about the Dow reaching over 11,000, but today it actually closed above that mark for the first time in about one and a half years. I am optimistic, and have invested more into the market. The recent moves have been terrific, and I am hoping for more upward movement, although I think we are going to go sideways for a while in the near future.

Take profits on Apple? No... Apple has more tricks up its sleeve, including an improved iPhone coming soon. And... more powerful PowerBooks. Also, I think the new iAd program could become very profitable.

As far as the iPad goes, it will sell well enough, in spite of it's pitfalls. This is because everyone and their brother will jump on the bandwagon and will soon have their own version of a "slate" or "pad" device. This will give huge legitimacy to the iPad, even though it doesn't truly deserve it in its current form.

Beyond that, I expect Apple computers to increase their percentage of the overall market slightly, and the global picture to look good. Eventually, there will be the next surprise device, as well as the ongoing evolution of the iPad, iPhone, iPod, and the entire computer lineup, as well as improved software.

In addition, it is my understanding that Steam has announced that they will add support for the Mac platform very soon, and gamers will be able to download major games to their Macs via Steam, or play from Steam servers on their Macs, and even be able to switch mid-game between platforms... this is good for Apple.

And...I expect that they will continue to report great earnings for a while longer.

So, no... I am not selling Apple... not just yet.

TM

fintail

The US needs an intervention :shades:

fintail

The most in raw numbers and the most as a percentage are not the same concept. The rich are not abused in this society. I get a distinct "pity the wealthy" vibe from time to time, and there's much to dislike with that ideal. Does anyone believe the wealthy are mistreated in the US?

The wealthy indeed benefit the most from society. From laws to military action to profits derived via infrastructure, this society operates to benefit some infinitely more than others. Those who reap the most can pay the most. The sons of the commoners die so the few can cash in. Those few can bear their own burden. In the past they did it...why not now?

I don't answer questions when my own are answered with questions. Should unearned wealth accumulated by the idle rich be exempt? I believe I have seen it desired as such in previous flat tax proposals. What would be the base number for an initial income or cost of living exemption? Or would there be such a concept? How would revenues compare to other schemes? How would loopholes for historical tax dodgers be closed? To speak of "fair", wouldn't the diminishing marginal value or utility of money at high income levels make it unfair to others? I can't see a simple raw flat tax solving anything other than putting some egoistic IRS types out of a job...and they probably have some kind of union to rehire them elsewhere anyway :sick:

The wealthy here aren't being abused. A flat tax is an interesting idea, but IMO it must have some aspect of being graduated or progressive.

houdini1

Most flat tax or fair tax ideas have a provision that those making less than about $20,000. pay no tax at all. A flat tax would probably not benefit me personally but I believe it would be great for the country so I am 100% for it.

It would be a tremendous economic boost for the U.S. and would generate more revenue for the government. There are so many tax loopholes now that a good tax lawyer can set the rich up by paying very low or no taxes. The flat tax would put a stop to that.

Will it happen? Only if we demand it. It is the last thing politicians want because it takes their power away. Power that they use to play off one group against another. They give tax breaks to those that back them and punish those who do not.

I fear our country is too corrupt to ever entertain a flat or fair tax plan....but I hope I am wrong.

Mr_Shiftright

An economist might agree with that grim reminder that a volunteer army is a way to insure that the children of the elite (be that elite in wealth or in education or in professional skills) do not perish in a hail of bullets, but very few people bring this point up because it is very disagreeable to contemplate.

I always thought it was fascinating that in the Civil War you could buy your way out of the draft and nobody much protested that. Can you imagine getting away with that today? You'd have to be much craftier.

Historians have said that the problem with the Roman army in the 4th century AD was that there were no Romans in it.

STOCK MARKET -- Schwab's top advisor is warning people to not over-expose to bonds. She creates some interesting graphs to show a pretty impressive economic recovery now taking place....impressive in the speed with which it is bouncing back from some pretty grim numbers. Little that I know, I'm going to heed her advice and keep the portfolio to no more than 25% in fixed income, and some cash too.

fintail

I guess I would have to see some numbers. I swear I remember reading, ages ago when I was in school, that Adam Smith (called the father of capitalism) argued against it, but I could be wrong. I'm all for something better than the system we have now, but it would have to be scrutinized. I don't know if I would agree with the underclass paying a greater share of their disposable income in taxes than the elite, for a system that provides far greater rewards for the elite than the lower earner.

People demanding change has no relationship at all to the existence of change. Notice we have been sliding downhill economically no matter who is in office.

fintail

In this "pity the rich" world, it might be disagreeable for many to imagine the children of the elite actually sacrificing for what benefits them. In modern wars no outright payments have been allowed to keep the few out of harm's way...but such a scheme did exist in a de facto way...just stick someone in a university. And no doubt a name could keep someone away from bloodshed too.

There does seem to be some gains out there, which could be exploited rather than playing it too safe with bonds. I don't think I'd be racing to buy European bonds anytime soon either. Germany is now in effect bailing out Greece, and the other problem nations have yet to be addressed. It warms my heart to see that the EU might not be sustainable.

euphonium

The Draft is no more & that is a big mistake.

IMO, every American male needs to spend a minimum of two years in an active military unit not of his choice, but where he is deemed to be needed. No exceptions, no deferments, no CO's, everybody serves. This process begins when he graduates from HS or turns 19, whichever occurs first.

Following his obligatory two years on active duty, he will be in an active Reserve for two years, being available if needed.

ROTC would be mandatory for all in college after serving their Draft obligation.

No Buyouts or Deferments involved making it fair to all.

fintail

If the US could again start acting for national defense and not on the "policeman of the world" ego boost or fighting to protect irresponsible rogue states, that wouldn't be such a completely objectionable idea - if it really was given no exemptions due to name or bank account. It might stop the chickenhawk ideal seen in the last decade. Otherwise, maybe having some kind of CCC or other public service type of group as a option could be positive too.

houdini1

I agree with you except for the ROTC part. What would be the point if you had already served on active duty and were in the reserve? I was in ROTC for 2 years and found it useless.